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Bruce also requires a calculation of taxable income for the most recent year ended December 31, 2019. The calculation should be prepared in Excel. He

Bruce also requires a calculation of taxable income for the most recent year ended December 31, 2019. The calculation should be prepared in Excel. He has also requested that you prepare the year-end journal entry for taxes payable using a marginal rate of 14% on income less than the small business deduction. Bruce has provided you with the draft statement of income and retained earnings (Appendix II) and additional information you will need (Appendix III).

Appendix II Quality Cabinets In Statement of income and retained earning For the period ended December 31 (Draft)

Current year

Prior year

(Draft)

(Audited)

Sales

$ 8,959,800

$ 8,834,000

Cost of sales

5,949,648

6,129,709

Gross profit

3,010,152

2,704,291

Expenses:

Advertising and promotion

357,900

266,500

Amortization

219,163

166,584

Automobile

140,800

102,600

Bad debts

17,250

19,110

Donations

1,200

1,000

Dues and fees

7,500

Insurance

69,600

57,200

Interest and bank charges

119,203

46,600

Office

101,200

108,700

Professional fees

67,700

34,800

Property taxes

44,700

40,900

Repairs and maintenance

207,100

155,100

Rent expense

84,654

Salaries and wages

1,160,460

1,175,600

Travel

117,666

103,900

Utilities

67,600

60,200

Warranty

72,059

69,482

Income before taxes

154,397

296,015

Income taxes (Note 1)

70,000

76,754

Net income

84,397

219,261

Retained earnings, opening

2,571,214

2,360,953

Dividends

48,750

9,000

Retained earnings, closing

$ 2,606,861

$ 2,571,214

image text in transcribed

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